Labor and the Coalition remain resolute that no refugees now detained on Nauru and Manus Island will ever be resettled in Australia as both major parties have been urged to consider alternative policies to offshore detention in the wake of the Guardian’s publication of the Nauru files.

During a belligerent and at times bewildering episode of ABC’s Q&A, the Nauru files dominated debate.

The academic and entrepreneur Erin Watson-Lynn from Monash University said Australia was “missing an enormous opportunity” and that the refugees now in detention should be viewed not as a problem but rather as a potential boon for the country.

“Research tells us that migrants are ... some of the most entrepreneurial people that we have in the country,” she said. “And, in fact, refugees are ... the most likely to start a business.

“As we move into the ideas boom and this knowledge-based economy, don’t we need more of those people here in country? We have an ageing population, we need to replace the labour market.”

The comedian and refugee advocate Corinne Grant urged both parties to consider alternative policies. “There are 1,800 immigration experts, including former members of the immigration department, who have recently put out a report and are begging to sit down with the government and talk about options around safety process and an orderly process in order to determine people’s claims.

“My question to you, Mitch [Fifield, manager of government business in the Senate], and to the ALP as well, is why will you not sit down with these 1,800 people who have options to give you? Why will you not sit down and listen to them?”

Fifield, who is also the communications minister, said none of the refugees held by Australia offshore would ever be brought to Australia: “We would be saying to the people smugglers, ‘Get back into business. You have a product to sell again.’”

He reiterated the immigration minister Peter Dutton’s response that every one of the 2,166 incident reports revealed in the Nauru files would be investigated.

But Fifield said Nauru’s sovereignty needed to be respected and that the laws in that country were “as harsh as Australia’s” in addressing assault and abuse. “I don’t think there is anything systematically wrong with the system of offshore detention,” Fifield said.

Labor’s spokeswoman on health, Catherine King, said Labor supported offshore processing as policy but condemned the government’s handling of the Manus and Nauru detention centres.

“The Australian government has a responsibility to make sure that people are treated, that they are safe, that they are treated with dignity and that they are treated humanely.

“It is also incumbent upon the government to get on with the business with the way these people are resettled. They have been offered no hope for three years.”

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Both Labor and the Coalition advocate for the resettlement of refugees in agreed “third countries”. Papua New Guinea has said it cannot resettle all of the 850 men now on Manus, and Nauru has refused to permanently resettle any refugees.

No viable third country – Cambodia has resettled a single refugee at a cost to Australian taxpayers of more than $40m – has been put forward by either party. Fewer than half of the countries in the Asia-Pacific are party to the refugees convention and could accept the refugees who are Australia’s legal responsibility.

In other discussion on Q&A, the government has no plans to reform the controversial section 18C of Australia’s Racial Discrimination Act, because it has “higher legislative priorities”, according to Fifield.

He echoed earlier sentiments from the prime minister, Malcolm Turnbull, that the government had more pressing concerns. “I’ve got to say, as a member of the government, while I appreciate many of the worthy arguments that some of my colleagues put forward in relation to 18C, it’s not something we have an intention to change. We have many higher legislative priorities.”

Section 18C makes it unlawful for a person to commit an act that is reasonably likely to “offend, insult, humiliate or intimidate” someone on the basis of their race or ethnicity.

Section 18D provides exemptions to 18C which protect freedom of speech. Artistic works, scientific debate and “fair comment on any event or matter of public interest” are protected, provided they are made reasonably and in good faith.

Both sections were introduced in response to three major independent inquiries, including the royal commission into Aboriginal deaths in custody, which found that racial hatred and vilification causes psychological harm to its targets, and reinforces and normalises more severe acts of discrimination, harassment, intimidation and violence.

Brendan O’Neill, the editor of Spiked Online, said Australia’s laws restricting hate speech and vilification were an “outrage”.

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“It’s very important when it comes to expressing opinion, even if it’s ugly opinion, we have to protect people’s right to do that, otherwise you’ll end up in a situation where the state has the right to decide what’s a good opinion or a bad opinion,” he said. “And least of all minority groups should support that.

“Every marginalised group in history has seen free speech as their greatest friend. It’s the means through they can express themselves, can argue against their oppression, through which they can challenge the authorities. We have to defend the right for free speech for everyone, particularly for marginalised groups.”